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Wednesday, 26 February 2014

New foreign investment rules with cabinet

New rules for the Foreign Investment Law will be issued in the coming weeks, the Ministry of National Planning and Economic Development said last week.

Directorate of Investment and Company Administration director general U Aung Naing Oo said the ministry had finished the revision, which is likely to result in more restrictions on foreign investment, particularly in the services sector.

“Some business sectors have been [taken off the list] and some have shifted [categories],” he said.“The changes will come out around the end of this month … The central aim is to improve the rules.”

The revision was prompted by complaints that the rules were contradictory in some sections and that they included restrictions that were not mentioned in the law.

The Foreign Investment Law was approved by the Pyidaungsu Hluttaw, or national parliament, on November 2, 2012. The law stipulated that the rules, which provide detail on the law, be issued within 90 days, and they were enacted on January 31. However, ministry officials said this meant the process was rushed and they have not had enough time to ensure clarity.

The current rules create five categories for business sectors, ranging from those that allow 100-percent foreign-owned businesses to those in which investment is not permitted. Other categories allow investment as a joint venture with a local partner, with approval from the relevant ministry or with approval from the ministry and a requirement to conduct an environmental impact assessment and social impact assessment.

“We had to rush to issue the present rules. We had to do them and the by-law within 90 days after the law was enacted,” a ministry official said in November, when the review was first announced. “We worked with the ministries to improve the rules but the ministries were also rushed to complete it on time.”

Another DICA official, who asked not to be named, said the cabinet has seen the new draft rules and made some comments.